Exempt from Tax Withholding

Let’s say one of your employees gives you a W-4 form, claiming exemption from withholding. Would you still have to send the form to the IRS?

According to the IRS, if you receive a W-4 form on which an employee claims exemption from withholding and his or her wages would normally be expected to exceed $200 or more a week, you must send a copy of that W-4 to the IRS service center with your next Form 941 return or with a cover letter. If the IRS determines that the form is incorrect, they’ll contact you with guidance on what to do.

Look in your Circular E (Employer’s Tax Guide) for more information.

Source: Internal Revenue Service, Washington, D.C., August 1998.